Number of Australian Retail Online Investors Soars to New Highs

The number of retail online investors has surpassed 700,000 for the first time, a report from Investment Trends, a global research firm, released today highlights. The findings also show that having a mobile version of an investment platform is a key differentiator for investors.

The 2018 First Half Online Broking Report from the research firm examines the behaviours and attitudes of online equities and ETF investors in Australia. The report is based on a survey of 11,000 investors and traders conducted in May this year.

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As at May 2018, 720,000 Australian-based investors placed a minimum of one share or ETF trade in the past year. This is an increase of 75,000 from six months ago.

According to the report, the increase in investors was due to the February market correction. This generated interest across the world in assets that were thought to be undervalued. Australian investors were no different, the report says.

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The importance of mobile capabilities is growing

Furthermore, the report highlights that having a mobile version of an investment platform is becoming an increasingly important differentiator when traders are deciding on which broker to choose.

The survey found that one in six online investors said that having this feature influenced their decision. This is significantly up from six months ago. As to be expected, the mobile functionality is particularly important for millennial traders. However, it is becoming more of a priority for older demographics as well.

Commenting on the results, the Research Director at Investment Trends, Irene Guiamatsia, said: “looking forward, mobile functionality is set to be a key battleground. CommSec has a first mover advantage and continues to dominate in this area, but brokers like IG and CMC Markets are providing strong competition.”

The report also measures switching activity – that is, how many investors choose to transfer assets from one brokerage to another. According to the report, switching activity was steady in Australia. In the past 12 months, only 4% of investors moved to another broker. However, for frequent traders, switching activity increased to 9%, from November’s low of 4% in 2016.

Guiamatsia added: “the improved retention efforts of the Big Four brokers – CommSec, ANZ, Westpac and nabtrade – has kept switching to a minimum. The frequent trader segment will continue to be a key battleground for online brokers. Brokers that most effectively identify and respond to the needs of frequent traders will benefit.”